Kroger posts 32 consecutive quarters of comp sales gains; increases outlook for year
CINCINNATI — Kroger posted its 32nd consecutive same-store sales gains as the grocer continues to grab market share due to a combination of a customer service initiative and value pricing.
"On-going market share gains are a product of Kroger’s Customer First strategy, where the company focuses on driving cost savings to reinvest in its four keys: prices, people, products and shopping experience," said Charles Grom, Deutsche Bank research analyst. "We believe the company has been particularly focused on investing in price and driving a pricing gap with conventional competitors. … The company’s lower prices are increasingly important to today’s more value-focused consumer."
During a recent price survey conducted by Credit Suisse in the Chicago and Dallas markets, Walmart has been widening its price gab between competitors with two exceptions — one of them being Kroger (the other being Target).
Kroger on Thursday reported a third-quarter sales increase of 10.3% to $20.6 billion, including fuel. For the period ended Nov. 5, total sales excluding fuel were up 5.1% over last year, the grocer reported.
Identical supermarket sales, without fuel, increased 5% in the third quarter over the same period last year.
Coming out of the third quarter, Kroger increased its diluted earnings per share guidance to $1.95 to $2.00 for the full year. Previously, the range was $1.85 to $1.95. The company also raised the low end of its identical supermarket sales growth guidance, excluding fuel, to 4.5% to 5% for the year. Previously, identical supermarket sales were expected to range from 4% to 5%.
Kroger also is bullish looking ahead to 2012, in part because of the generic wave that’s coming. "In terms of pharmacy, we’re just delighted with our trend and where we are," said Rodney McMullen, Kroger’s president and COO. "As you look out to 2012, there’s a lot of major drugs that will move out to generics. … The growth profit rate will be helpful."
Rite Aid comps increase 1.9% in November
CAMP HILL, Pa. — Rite Aid’s same-store sales increased by 1.9% in November, compared with the year-ago period, the company said Thursday.
The country’s third-largest retail pharmacy chain said front-end same-store sales decreased by 0.6%, while pharmacy same-store sales increased by 3.1%. Meanwhile, total drug store sales were $2.4 billion, a 1.4% increase over November 2010’s $2.37 billion.
For the 13-week period that ended Nov. 26, same-store sales increased by 2% over the same period last year. Same-store sales on the front end were flat, while pharmacy same-store sales increased by 2.9%. Total drug store sales were nearly $6.3 billion, compared with nearly $6.2 billion last year.
For the year to date, same-store sales increased 1.6%, including a 0.8% increase in front-end same-store sales and a 1.9% increase in pharmacy same-store sales. Total drug store sales were $18.9 billion, compared with about $18.7 billion during the first 39 weeks of fiscal year 2010.
Fred’s reports increase in November sales
MEMPHIS — Fred’s reported that its November sales rose 4% for the four-week fiscal month period ended Nov. 26.
Total sales were $152.1 million, up from $146.1 million in November 2010. Comparable-store sales for the month rose 1.5% on top of an increase of 4.7% in the same period last year, Fred’s said.
During the month, Fred’s opened five new express pharmacy locations.
"Lapping very strong sales in the year-earlier period and facing an extremely aggressive competitive environment, we are pleased with our overall sales performance for November," Fred’s CEO Bruce Efird said. "Comparable-store sales growth, driven largely by increased customer traffic, continues to reflect the success of our sales and marketing initiatives. Our best-performing Core 5 departments during the month included pet, household supplies, and pharmacy. As Christmas nears, our stores are well stocked and our customers will find great values and strong merchandise selections to finalize their holiday shopping."